Leak v Mungioli
Attorneys and Parties
Brief Summary
Workers' compensation lien and allocation of litigation expenses in a third-party settlement; proper consent letter language under Workers' Compensation Law § 29 [requires a workers' compensation carrier to contribute its equitable share of litigation expenses, including counsel fees, when it benefits from the claimant's third-party recovery].
The Supreme Court granted the plaintiff's motion to amend the carrier's consent letter to substitute the plaintiff's proposed language governing calculation of legal fees.
The grant of the motion to amend the consent letter was reversed; the request to substitute the plaintiff's language was denied.
Because the plaintiff's proposed calculation would result in the plaintiff's legal fees being paid twice, contrary to the proportional cost-sharing required by Workers' Compensation Law § 29 and cases such as Matter of Kelly and Burns v Varriale.
Background
The plaintiff, injured during her employment at Hicksville High School, received workers' compensation benefits from the Hicksville Union Free School District (the carrier) and pursued a third-party personal injury action. After mediation, she received a $995,000 settlement offer and sought the carrier's consent. Disputes arose over consent letter language regarding how legal fees would be calculated and allocated. The plaintiff moved to compel amendments deleting the carrier's language and inserting her own.
Lower Court Decision
By order dated May 21, 2024, the Supreme Court, Nassau County, granted the plaintiff's motion to amend the November 15, 2023 consent letter by substituting the plaintiff's proposed legal-fee calculation language.
Appellate Division Reversal
The Appellate Division reversed the order insofar as appealed from and denied the motion to amend the consent letter, holding that the plaintiff's proposed language would improperly result in legal fees being paid twice. The court did not reach the carrier's remaining arguments.
Legal Significance
Reaffirms that a workers' compensation carrier must contribute only its equitable share of litigation costs in proportion to the benefit received and that consent letter terms cannot create a double recovery of legal fees. Aligns consent practices with Matter of Kelly and Burns v Varriale under Workers' Compensation Law § 29.
Consent letters in third-party settlements involving a workers' compensation lien must reflect proportional allocation of litigation expenses; language that leads to double payment of counsel fees is impermissible.